money, and it is this -- people first, then money, then things. now you stay safe. bye-bye. tonight, drug super bowl. ♪ catch me doing a massive drug conference next week could make or break a number of biotech stocks. give you the inside scoop with a special report. plus -- ♪ take my breath away that's what traders are saying about the stock market as fewer are making record highs. and one is screaming higher in the wake of apple's beats deal. >> isn't that special? >> what it is and how you can

profit. the action begins now. live from the nasdaq, i'm melissa lee. these are the traders and in colorado. and in the best week in a month, momentum names are regaining momentum. netflix, yelp and tesla, is this a sign that the rally is just getting revved up? get in the money and find out now. mike, i've got to go to you, these are serious games, and they look like they're on the mend. >> i have a lot of skepticism and about these in particular, hard to get your arms around, netflix, trading at 150 times earnings. the other ones, no earnings to speak of 13 times revenues. carter was mentioning before the show. he was talking about penthouses in hyde park going for $250 million and beach houses in the hamptons for $167 million.

i don't know what to make of the valuations, but they have been propelled by cheap money and a lack of someplace to put them. the market is strong, it's going to support the stocks, and the vix reflects that at less than 12. >> it's really a phenomenon when you're deeply oversold, it's a positive bounce. is that a setup for the downdraft? we're in that camp. figure it out. >> it is puzzling. we're witnessing the below the 200-day moving average. the vix is complacent, but we have the bounce back in the high-momentum names. >> a lot of these bounces -- all bounces are not created equal. how is that? okay? netflix, rallied 30%. it's a specific story. we know that there's some very large players involved. a whole bunch of competition issues going around. who knows what the partnership landscape is going to look like.

tend of the day. that stock, from 400 to 300 right back to 400. that's a no-touch. i'm not going to get involved. caught it on the short side, i got my face ripped off on the short side the second time. that's on the band list. the rest of the names, i'm not impressed with the bounce in amazon, the bounce in yelp, and linked in, for instance. these are three nasty-looking charts. mentioned the rustle, and the s&p closed and all three up on the year today. that's the first time in a long time today, but the rustle looks sick to me. >> yeah, the structure of the russell is terrible. that's your point. the issue is we know the s&p and virtually unchanged. it's under the surface that parts are getting hurt and bouncing back. and equities and aggregate have gone nowhere. there's a good visual here on the screen getting nowhere. and the mean reversion that's

taken place. this looks at the russell growth and value over the last two years, and you see how, of course, we've had a reversal of fortunes. there's a collapse in growth, and a reemergence of value. but look at the same chart on a five-year basis, the spread is still quite epic. that makes the case, dan is making the case, you should not be chasing some of these bounces. >> that being said, i have to make one point. you can't short a dull market. i've tried to. we talked about, the spy has a failed breakout, that's the one to go for. i got to tell you people that closed at 1900, that's a beautiful consolidation that you can see in the large cap index. ever. >> there's a big difference between sitting here and saying we're going to short this and saying i'm not going to participate and try to chase what are overbought winners by going after the momentum stocks. we're all on the same page. i don't see how people get enthusiastic if you're taking a look at what's going on under the surface. >> tonight, a trade on twitter, walk us through the thesis.

>> this is interesting. it's disconnected with the market when you think about it. and i have to tell you, looking at the stock today, it had the lowest closing low ever today at 3050. to me, this is one that, you know, the fundamentals are what they are. we don't really know yet. the company has not common demonstrated that they can engage users. the way people expect facebook did right out of the gate as a publicly-traded company. user growth is anemic. they have two quarters since they have been public, and they've really missed on those levels. so to me, the next identifiable catalyst is q2 earnings, probably in early to mid-august. that's going to be the opportunity where investors and analysts alike, let me tell you, analysts are mixed on the name.

8 buys, 18 holds and 8 sells. they have an opportunity to see if they should be publicly-traded. make one other point. twitter has an $18 billion market cap. if they had not gone public, i'm telling you this would have been one of the hottest private properties out there. if you think about the fact that facebook paid $19 billion in cash and stock for what's app. you have to look out to september. i want to put a trade on here. probably what it breaks 30. 26, the ipo price, big support. if we get a switch down next week, this is a trade. i want to do. it's a place holder. define a range to get lock on the down side but also on the upside. >> i like this tried. one of the reasons is this was a name before the ipo, a lot of people speculated, what do you think it's worth? the number was 12 billion bucks. that was before legitimate revenue growth. for twitter, 2015 revenues probably around 2 billion bucks. and look at facebook. when you have oversupply of

stock, which you have here, this is a situation they are starting to see growth. this is unlike the netflix and teslas of the world. this actually is a stock that you should have have tash this is a lot of skepticism. >> today, it was 30.65, i was looking out to september because there's no august options listed, and i want to catch that next earnings event. today when the stock was 30.65, you could have sold the september 26 put for $1.45, and used the proceeds to buy the september call for $1.45. cost you nothing. what you have done is put the stock on 26 september expiration. to the down side. you start losing from there. at 3, you have unlimited risk. there's a lot of asymmetry to the trade. between 36 and 27 you wouldn't lose anything. now here's the thing. mark the market between now and then, as the stock is closer to 26, you'd make money, and make

it as it got higher and this is creating a wide band for something that's a volatile situation, a controversial story. let me tell you, if you get a move like facebook did in 2013, once they're able to demonstrated to street and investors how they were going to monetize their user base, this stock could go 40, 45, 50. start skipping up like that. very quickly. >> you get the long stock if it's put to you at the ipo price. and the stock doing three times the revenues that they were at the time of the ipo. that's when you need to know. >> we're stuck at the lock off came up at of 30. there's no indication that you should do anything but take a wide band. >> no fear. the vix hitting a 14-month low today. what's that mean for stocks? >> here's how it lays out. the vix is the fear gauge of the market. it gauges where options are price, with the market volatility. closed below 11.5 today. what's crazy is that the vix has

only gotten below that 11.5 mark one other time in the last seven years. so what's happened recently when the vix has fallen below that 12 level here. as you can see on the chart, we circle them, it's come ahead of near-term weakness or pull backs in the market. on the other hand, options traders aren't predicting very much turbulence here. five times as many calls as puts traded today. but many were sold at the bid price. meaning that a lot of traders are betting against the spike in the vix. they're selling away any upside in the vix. so a very interesting trade on volatility to watch. back to you. >> thanks so much. the market at all-time highs, the vix at multi-year lows, have investors become too complacent. check in with carter. who made it over to the smart board. >> the day to day volatility are high.

the real issue is a breadth issue. and breadth is a very important thing and it's been weak for months. here is one way to measure, it's the advanced decline line, and i've used a broad index. the new york stock exchange come positive it, stock only. you have a series of higher highs and higher lows, we have a stall that's taken place for about four and a half about four and a half months. it's not improved even as the market's gone higher. another way, this is even worse. this is the s&p over the past two years, and yet if you track the percentage of stocks in the s&p or the new york stock exchange composite that are above the average, this peaked a year ago and declining since. it's a function of fewer stocks participating in the rally. now, at this point, where to go and look for the complacency, it's the dow jones transports.

i want to show you a few comparative charts. here is the dow jones itself versus the 20 transports. this is a two-year chart, and obviously quite clear that the spread is quite extreme. year to date, the dow is unchanged, transports up 8%. look at longer term charts. this is the five year chart, again, dow jones industrial, 30, versus the 20 transports. the spread is quite epic. here is ten years. you're starting to get the message. and here is as far back as we can go to the 1980s. this is not sustainable. and our bet is that this is where the complacency is as great a risk as anywhere. a one-year chart looks orderly. but the principle is this, so far above trend, and it's a well-defined trend, play for the mean reversion, and as it fails, we will make the bet it will stall. go short the iyt. >> mike, how do you implement that? >> i think the easiest way to do

this and bearing in mind what.com was talking about this, and selling at the near term volatility, i think options are grossly underpriced. i'm going to buy the december 140 puts in the iyt. pay $6 for those. and to finance that, sell the july 140 strike puts for $2. what's interesting, i get net long options, obviously if volatility pops, take advantage of that by seeing the increase in value, but the other thing is, if the institutional traders selling those vix calls are right, we actually might see a brief period of relatively low volatility leading into it. i'm using the near-dated options to advance the long puts overall. >> dan, i have a feeling you like this trade. >> i do. but on the show a little more than a month ago, i tried to pick a top in the iyt, it went straight up. i think if you do this, you have to do what mike's doing.

even with vol low, you are financing the longer-dated puts. in this market, it's going to break out. the large caps, iyt will be part of that. i think you want to help look to finance the down side for the mean reversion. >> send us a tweet at the options. right after the show. and tonight, mike has a bullish trade on mankind. in addition, you'll find educational material and the hottest options news. check it out, coming up next. drugs and money. >> stingers, pal, stingers. >> no, we're not talking about miami vice, we're talking about the biggest drug conference in the world. and it could make or break biotech next week. and the good, the bad and the ugly. dan had a number of winners and loses. which he's sticking with and which he's folding when options action returns. ♪

♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. . it is the pharmaceutical equivalent of the super bowl. game seven of the nba finals and the world series. all in one, hence the faux sports music. we're talking about next week's asco conference. can we expect any blockbuster announcements. meg is breaking that down. >> so analysts say this year is a big pharma focus meeting. that's what we're hearing, but,

of course,s it the biotechs that always move. and there are names that are watching closely. there was a data drop, one was insight, they have a improved drug, and a hot drug in immunotherapy. that's a really big area at the meeting this year. and analysts looking for more data that could reverse the declines. more data at the meeting. another is clovis. that stock went up a couple of weeks ago and expecting more at the meeting which could be good. and an approved drug, pulled last year due to safety concerns, back on the market. we're looking at more data on that, looking to see doses and the patients. and the big mover, that was bristol meyers got downgraded after the data, with the immuno therapy. see this if they do that after the downgrade.

>> thanks for that. one thing you notice about the charts, most of the names peaked beginning of march. so will this help? >> yeah, the big space in biotech was specifically the oncology drugs. the cancer drugs in particular. that was the growth opportunities. they trade at astonishing multiples because their speculative. based on the forecast that these things are going to come up. a lot of companies in the same space, one is cell gene. and the way to capture the plays without the risk on the high volatility with insight or clovis, both are expected to move 16 to 20% in the options market, just play ibb. take advantage of the fact that options prices are up.

not only because of asco, but there are health care conferences. goldman sachs is having one. sell a put spread on ibb. the one that i'm looking at specifically is the july 225. sell the puts, and protect yourself for 6 bucks. you're collecting 40% of the distance between the strikes. you're taking advantage of the facts there's a lot of news in the space between now and the end of june. between these conferences and between asco. and you get to collect money if it just sits here, which is what ibb has been doing. >> ibb is dominated by the big names. and they are not expensive. so you have that underlying component. >> but what's your take, carter? we were discussing this during the break, and you said modestly, you said i did call the top back in the end of february, precisely the top, by the way. what do you see here? >> here's the thing. once you have something that's quite extended, like the transports now, and it does indeed correct a certain percentage, do you press the short and cover some

and go from there? at this particular time, the ibb is a pair of twos, not bearish or bullish. fair money, dead money. >> that's how we're trading it by the put set. >> at it again. and a winning pandora trade, and a loser. it was a wild week for dan nathan, but now a plan to make for money with tech stocks. find out what it is when options action returns. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.

[ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade.

talk about streaming higher. shares of pandora up 9% this week. here's how dan cashed in. on options action, sometimes risking less to make more isn't quite enough. sometimes you want more cash. and that's just the case with dan's bullish bet on pandora. they thought the shares were about to sing a happy tune. >> i think it could be in play and reasonable, and could be the sort of acquisition target that makes sense for a lot of deep-pocketed players. >> but just buying the stock. come on, dan, 100 shares set you back $2,000. so to spend less, he brought the september 28 strike call for $1.50.

he needs it to rise above $28, or $29.50. by september expiration. but spending a buck 50 to get in, dan, you're forgetting our number one rule. >> you cannot make friends with the rock stars. >> actually, it's always limit your risk. so to cut costs, dan sold the december 35 strike call for 50 cents and created his call spread. but he did something better, he made making money easier, and and here's how. between the buck 50 and the 50 cents with the higher strike call, dan is now laying out just one dollar. and now instead of needing it to rise above $29.50, but he needs it to get above $29 expiration. >> he should work for nasa or something. >> or star in options action. because since the time of the

trade, shares have arisen 10%. with plenty of time left for expiration, all of the fans are -- all are screaming the same question, how can we make even more cash? before we answer that, let's see how much dan has made. shares are up 12%, so not too shabby. but dan bought the call spread for a buck, and it could be sold for $1.40. how do you make more cash from here? >> you sit on your hands and don't do anything. you have a lot of time to play out. see if the apple/beats deal finishes, who's speculating who's next. this is one where i think do very little. you have it where you want it. we chose out of the money for a purpose. we have a nice range of potential possibility if this stock can just go up another 10, 20%. >> all right. but it wasn't all dantastic for

dan, you, the qs struggled. how are you handling this? >> traders know, you have to cut your losses. the etf broke out here. the thesis was large cap strength, follow the smaller cap higher valuation. it didn't happen. the options i bought were 50% what i paid. i cut them and look for a better entry. >> you think soon though? >> i think it's very soon. doesn't matter if it's the qs or the russell, and i'm looking at that. i'm interested in being long puts here. having short deltas, i don't see how that's a bad move here. >> up next, the final call from the options pits. ♪ ♪ ♪ ♪

[ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. time now for the final call. last word. dan. >> yeah, if twitter goes lower, bullish risk reversals. >> transports are outperforming the dow, sell iyt.

>> options are incredibly cheap. do not sell them. >> looks like our time has expired. i'm melissa lee. check out our website, and the daily segment inside fast every weekend day. see you back here next friday for options action. meantime, mad money starts right now. >> announcer: the following is a paid presentation for the nutribullet brought to you by nutribullet llc. special tv offer. stay tuned to find out how you can get the nutribullet superfood nutrition extractor free! that's right. get the complete nutribullet system free! details just ahead. >> my muscle aches, my back aches really started to decrease significantly in one week. >> first night that i actually used the nutribullet, i actually slept really well. that was exciting. that was phenomenal. >> the bad cholesterol which was